CHINA TELECOM(601728) 国信证券·2025-03-27 03:15Investment Rating - The investment rating for the company is "Outperform the Market" [5][23]. Core Views - The company is expected to achieve a revenue of 523.6 billion yuan in 2024, representing a year-on-year growth of 6.1%, with a net profit of 33 billion yuan, reflecting an 8.4% increase [10][11]. - The company plans to increase its dividend payout ratio to over 75% within three years, with a proposed dividend of 0.09 yuan per share for the end of 2024 [3][23]. - The company is focusing on upgrading its Tianyi Cloud services to smart cloud solutions, with a significant revenue increase in its digital industrial business [2][11]. Revenue and Profitability - In 2024, the company’s service revenue is projected to be 482 billion yuan, a 3.7% increase year-on-year, while mobile communication revenue is expected to reach 202.5 billion yuan, growing by 3.5% [10][11]. - The average revenue per user (ARPU) for mobile users is stable at 45.6 yuan, with a net increase of 16.75 million mobile users, totaling 425 million [10][11]. - The company’s return on equity (ROE) is expected to reach 7.3% in 2024, an increase of 0.4 percentage points year-on-year [10][11]. Digital Transformation and Cloud Services - The digital industrial business is anticipated to generate 146.6 billion yuan in revenue, marking a 5.5% growth, while Tianyi Cloud revenue is projected to be 113.9 billion yuan, up 17.1% [2][11]. - The company is accelerating its transition to smart cloud services, with significant investments in infrastructure and new service offerings like "Quantum+" [2][11]. Capital Expenditure and Cost Management - The company’s capital expenditure for 2024 is estimated at 93.5 billion yuan, with a planned reduction to 83.6 billion yuan in 2025, a decrease of 10.6% [2][19]. - The company has effectively managed costs, with a slight decrease in sales expenses and a controlled increase in R&D expenses, which grew by 11.3% [2][15][19]. Financial Forecasts - The company’s net profit forecasts for 2025, 2026, and 2027 are 35.9 billion yuan, 38.7 billion yuan, and 42 billion yuan, respectively, with corresponding price-to-earnings (PE) ratios of 16, 15, and 14 [3][23]. - The projected earnings per share (EPS) for 2024 is 0.36 yuan, increasing to 0.39 yuan in 2025 [4][26].